ARPU, ARPDAU and ARPPU: Mobile Game Revenue Metrics Explained

ARPU, ARPDAU and ARPPU all answer one question: how much money does a game make per player? They differ in which players they count and over what period, and they are often mixed up, even in meetings. This guide defines each one, works one example all the way through, and then shows how they feed into the number that decides your marketing budget: lifetime value.

The definitions

ARPU: average revenue per user

Revenue over a period, divided by the number of users active in that period. Usually monthly, using monthly active users (MAU).

ARPU = revenue / active users

ARPDAU: average revenue per daily active user

The revenue for a day divided by that day's active users. Over longer periods, divide by the number of days as well. It is the standard daily health measure in mobile games, particularly ad-monetised ones, because it responds quickly to changes.

ARPDAU = revenue / days / average DAU

ARPPU: average revenue per paying user

Revenue divided by only those users who paid. It tells you how much your buyers spend, and it is mainly about in-app purchases. It ignores everyone who pays nothing, so a high ARPPU can hide a game that almost nobody pays in.

ARPPU = revenue / paying users

Paying conversion

The share of active users who pay anything in the period. It connects ARPU and ARPPU.

Conversion = paying users / active users

DAU/MAU, or stickiness

Average daily active users divided by monthly active users: the share of your monthly audience that shows up on a typical day. Published benchmarks disagree widely, so compare against your own past results and similar games.

One worked example

As an illustration with invented numbers, take a game with one month's results: revenue of 90,000, 60,000 monthly active users, an average of 12,000 daily active users, and 1,500 paying users.

• ARPU = 90,000 / 60,000 = 1.50 per user, per month.
• ARPDAU = 90,000 / 30 days / 12,000 = 0.25 per daily user.
• ARPPU = 90,000 / 1,500 = 60 per paying user. (Assuming, for simplicity, that all revenue is from purchases. If much of it is from ads, separate the two first.)
• Paying conversion = 1,500 / 60,000 = 2.5%.
• DAU/MAU = 12,000 / 60,000 = 20%.

These connect to one another, which helps you diagnose things:

• ARPU = ARPPU x paying conversion, so 60 x 2.5% = 1.50.
• ARPU = ARPDAU x days x DAU/MAU, so 0.25 x 30 x 20% = 1.50.

So if monthly ARPU falls, there are only so many places to look. Did buyers spend less, did fewer people buy, or did people show up less often?

Separate ads from purchases

A single ARPDAU can hide two different businesses. Split it:

• IAP ARPDAU depends on conversion and on spending per buyer. It is usually concentrated in a small number of players, which makes it noisy.
• Ad ARPDAU depends on impressions per daily user multiplied by eCPM, divided by 1,000. It is usually spread more evenly, and it can shift with season and country.

Most games now use both, as described in mobile game monetization models. Report the two together, and you can see at once if a change has only moved revenue from one to the other. A new shop might raise IAP revenue while reducing the ads watched, for example.

From ARPDAU to lifetime value

Lifetime value (LTV) is what a player earns you across their whole time in the game. It is what you compare with cost per install to decide what you can spend on acquiring users. One quick estimate multiplies ARPDAU by the number of days an average new player is active.

That days-active number comes from your retention curve. Each day's retention is the probability a player shows up on that day. Add those together and you get the expected active days. As an illustration, if the retention figures across the first 30 days add up to 4, then the average new player is active for 4 days, and at an ARPDAU of 0.25 their 30-day value is about 1.00. With a CPI of 0.80, that is a 30-day return of 125%.

This also shows why retention matters so much. If you improve retention, players have more active days, so LTV goes up at the same ARPDAU, and you can pay more to acquire each one. And because ARPDAU and retention can pull against each other, you should always watch them together.

Things that distort the numbers

• Gross and net revenue. Decide whether you are counting before or after store fees and ad network shares, and keep to it. Comparing your net to someone else's gross is a common source of false worry.
• The denominator. Dividing monthly revenue by DAU instead of MAU gives a much bigger number, so check what any published ARPU uses.
• New users. A big install push usually lowers ARPDAU for a while, because new players have not started to spend. That can look like a monetization problem when it is simply a change of mix.
• Whales. In IAP games, a few big spenders can dominate. Median spend and spend bands say more than the average does.
• Refunds and fraud. Exclude refunds, and validate receipts so faked purchases do not inflate results. See mobile ad fraud.
• Country mix. A shift towards lower-priced markets can reduce ARPDAU without anything getting worse in the game. Break results down by country tier.
• Season. Ad rates rise and fall with the calendar, as Q4 and Q5 shows.

What actually moves each number

To raise ARPDAU from ads

• Offer rewarded ads at moments when players want something: an extra life, double coins, a free spin. See rewarded ads.
• Tune interstitial frequency and placement, watching retention at the same time.
• Improve auction competition, for instance by choosing and testing mediation.

To raise paying conversion

• Make a cheap first offer available early, to turn a non-payer into a payer.
• Remove friction in the shop, and show prices in the player's local currency.
• Offer purchases at moments of need, and do not push them when a player has just lost interest.

To raise ARPPU

• Add depth: higher-value bundles, season passes, and goals that repeat spenders care about.
• Use live events to give buyers fresh reasons to spend.
• Watch for pressure tactics. They can lift this month's number and damage retention and reviews, and some are restricted by regulators.

To raise stickiness

• Provide reasons to return tomorrow: daily rewards, streaks, events and social features.
• Fix early sessions first, as players who leave on day one never see your later systems.

Where ads come in

Revenue metrics are often seen as the job of the product team, but your ads shape them too. An ad that shows the game honestly attracts people who want that game, and they tend to stay and spend. A misleading ad can bring cheap installs that vanish, leaving a low CPI and poor LTV. That is why you should judge creative by the revenue of the cohort it brings, not only by the install. A playable ad has an advantage, because the viewer has already tried the mechanic before they install.

Which metric to use when

• Checking daily health or a new release: ARPDAU, split by ads and purchases, alongside retention.
• Comparing monthly business performance: ARPU, plus DAU and MAU.
• Studying your shop and pricing: ARPPU and paying conversion.
• Setting a user acquisition budget: cohort LTV and return on ad spend, never ARPDAU alone.